Reply #13: Ok, now we are getting somewhere [View All]

[Taitertots]

First I need to address the basic macro economic tenants that you are incorrectly interpreting. The more cash you have in the market place is not the sole determinant in price levels. After the crash the country was experiencing strong deflationary pressures due to crashing consumer demand. Easing isn't causing high inflation because it is countering strong deflationary pressures. When inflationary pressures return, the Fed will sell the bonds it bought at a huge profit and prevent inflation.

As for the banks: They don't want inflation. Inflation favors people who are in debt, not lenders.

"If the US were sitting on massive reserves of capital"
We are. Massive corporations in the US hold trillions of dollars on reserve. Easing converts their long term non-liquid assets into cash, pumping liquidity into the market to prevent financial collapse. It certainly does benefit working people by preventing a total breakdown in the economic system.

"As for 'targets', I believe this is an artificial concept that doesn't really apply to a truly organic economy, and I'm sure you'll disagree with that"
If the current monetary growth rate is too high, what do you support doing? We are already low single digits. Do you support causing deflation?

The only problem that the government has is managing it's income stream. Tax the wealthy and stop going to war, our money problems will disappear.